On Tuesday, the White House paused federal grants and loans, however, a memo acquired by the media has relayed that student loan borrowers are likely to remain untouched by this decision. The statement, delivered by White House budget office, announces the temporary halt to federal grants, loans and other financial aid, commencing at 5 p.m. on Tuesday.
An official from the Department of Education reassured Investopedia that this halt does not extend to funds "provided directly to students," such as Federal Pell Grants and Direct Loans. Students in need of applications and disbursements under these programs should continue as normal.
The Department of Education has not yet determined whether this pause will impact non-direct loans, such as federal campus-based programs like the Federal Work-Study or the Federal Supplemental Educational Grant Program (FSEOG). Through these schemes, the government forwards funds to participatory schools which in turn give the money to students.
When questioned, the spokesperson explained, “The funding pause outlined in the January 27, 2025 OMB memorandum applies solely to discretionary grants at the Department of Education. Department leaders will review these in line with Trump Administration priorities." Neither the Federal Work-Study nor the Federal Supplemental Educational Grant Programs fall under discretionary grants, although the spokesperson refrained from offering a direct comment on either scheme.